Stakeholders call for forensic audit of NIMASA vessel funds

The Sea Empowerment and Research Centre has renewed its call for an independent forensic audit of the Nigerian Maritime Administration and Safety Agency, following conflicting claims over the management and currency status of the Cabotage Vessel Financing Fund.

SEREC, in its latest bulletin signed by its Head of Research, Eugene Nweke, on Tuesday, explained that the controversy surrounding the fund had reinforced its earlier concerns about transparency, accountability and the possible erosion of contributions through currency conversion and administrative decisions.

The body maintained that the latest disclosures had validated its earlier demand for a thorough audit of NIMASA’s financial records covering the period from 2004 to date.

SEREC said former NIMASA Director-General, Temisan Omatseye, had disclosed that dollar-denominated contributions were converted into naira and invested in fixed deposits during his tenure, while the incumbent Director-General, Dr Dayo Mobereola, maintained that the fund remained in dollars with the Central Bank of Nigeria.

“The conflicting accounts raised questions about the actual value, location and management of the fund, which was established to provide financing support for indigenous shipowners under the Coastal and Inland Shipping (Cabotage) Act,” SEREC stated.

SEREC argued that shipowners, as contributors to the fund, “deserved documentary evidence showing how much had accrued, where the money was domiciled, the interest generated and the amount currently available for disbursement.”

It also warned that converting dollar contributions into naira exposed the fund to significant foreign exchange losses, given the depreciation of the local currency over the years.
According to the group, if the contributions were converted into naira and retained in that currency, the fund could have suffered a substantial erosion in its real value, undermining its original objective of strengthening indigenous shipping capacity.

SEREC maintained that the CVFF was contributors’ money and should not be treated as government largesse, stressing that shipowners had a legitimate right to demand accountability.

The group insisted that no disbursement should take place without a comprehensive forensic audit to establish the fund’s financial history and current position.

“The audit should cover all contributions, currency conversions, investments, accrued interest and administrative transactions relating to the fund from 2004 to date,” it stated.

SEREC stressed that the findings would provide the necessary clarity on the financial position of the CVFF and help restore confidence among indigenous shipowners seeking access to the facility.

Also speaking, a former President of the National Association of Master Mariners, Capt. Tajudeen Alao, reiterated the need for a comprehensive audit of NIMASA’s accounts from 2004 to date to establish the actual status of the CVFF.

Alao said an independent audit would help “resolve the lingering controversy over the management and currency denomination of the fund, particularly conflicting claims about whether the dollar-denominated contributions were converted to naira or remained in dollars with the Central Bank of Nigeria.”

He said that a former Director-General of NIMASA had confirmed that the dollar funds were converted to naira and deposited with the CBN during his tenure.

According to Alao, only a comprehensive audit covering the period from 2004 to date would establish the true financial position of the fund and provide clarity on its management over the years.

He also expressed concern over the prolonged delay in disbursing the CVFF, lamenting that the failure to make the fund accessible to indigenous shipowners for more than two decades had forced many operators out of the shipping business.

He described the situation as detrimental to Nigeria’s maritime industry and efforts to develop indigenous shipping capacity.

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Alao further argued that cargo guarantees and the ship-management capacity of prospective beneficiaries should be considered among the eligibility requirements for accessing the fund.

He explained that prospective beneficiaries must demonstrate the ability to manage vessels and secure cargo to ensure that loans obtained from the fund were effectively utilised and repaid.

He noted that the CVFF was designed to provide financial support to indigenous shipowners and boost local participation in the shipping industry, but said its failure to disburse the funds over the years had frustrated these objectives.

The controversy surrounding the fund’s status has intensified following conflicting accounts by past and present NIMASA leadership over its currency denomination, conversion and management.

“A comprehensive audit would establish the facts, promote transparency and address the lingering questions surrounding the financial status of the CVFF,” he said.

Meanwhile, the Nigeria Shipowners Association has urged the Minister of Marine and Blue Economy, Adegboyega Oyetola, to explain the reported conversion of the CVFF from dollars to naira, maintaining that the fund should retain its US dollar denomination.

In a recent statement, NISA President, Sola Adewumi, said the Federal Ministry of Marine and Blue Economy and the Nigerian Maritime Administration and Safety Agency should address claims by a former Director-General of the agency, Temisan Omatseye, that the CVFF and other maritime funds were converted to naira during his tenure.

Adewumi questioned the rationale behind converting the fund, arguing that the guidelines governing its administration did not provide for such a conversion.

He noted that shipowners continued to make payments to the relevant authorities in US dollars for shipping-related transactions and other obligations.

According to him, the ministry and NIMASA should provide an official explanation, particularly as Omatseye, having previously headed the agency, was in a position to understand how the fund was managed.

“If you have heard from the former DG that the money has been converted to naira, it is left for the DG and the ministry to counter what the man has said because he was once in that position, so he should know better than people like us,” Adewumi said.

The NISA president wondered why the fund should be converted to naira when shipowners were still required to make their payments in dollars.

“Money was not meant to be converted to naira ordinarily because we are paying in dollars. Even as we speak, we still pay them in USD. So, why are they converting it to naira? These are the questions we should ask ourselves,” he said.

Adewumi maintained that the existing CVFF guidelines only stipulated the contributions expected from shipowners without making provisions for converting the fund into the local currency.

He argued that if the government intended to maintain the fund in naira, the authorities should explain why contributions and other shipping-related payments were still required in dollars.

“Does the guideline say that the money should be converted? No. The guideline only says that we should contribute, and for all the transactions we are doing, we are paying for shipping, developing, and it’s usually in USD. So, if they want it in naira, then why should they ask us to pay in USD?” he queried.

He clarified, however, that he was not directly involved in administering the fund, noting that his position was informed by the provisions of the guidelines and the information at his disposal.